2 Significant Accounting Policies
2.1 Basis of Preparation of Financial Statements
The financial statements of the Company have been
prepared in accordance with the Indian Accounting
Standards (Ind AS) as per the Companies (Indian
Accounting Standards) Rules, 2015, read with
Companies (Indian Accounting Standards)
Amendment Rules, 2016, as amended and notified
under Section 133 of the Companies Act, 2013 (the
Act) and other relevant provisions of the Act.
The accounting policies adopted in the preparation
of the financial statements are consistent with those
followed in the previous year.
Current Vs Non-Current Clarification
The Company presents assets and liabilities in the
balance sheet based on current/ non-current
classification.
An asset is treated as current when it is:
Expected to be realized or intended to sold or
consumed in normal operating cycle
Held primarily for the purpose of trading
Expected to be realized within twelve months after
the reporting period, or
Cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least
twelvemonths after the reporting period.
All other assets are classified as non-current.
A liability is current when:
It is expected to be settled in normal operating cycle
It is held primarily for the purpose of trading
It is due to be settled within twelve months after the
reporting period, or
There is no unconditional right to defer the
settlement of the liability for at least twelve months
after the reporting period.
The Company classifies all other liabilities as non¬
current.
Deferred tax assets and liabilities are classified as
non-current assets and liabilities.
The operating cycle is the time between the
acquisition of assets for processing and their
realization in cash and cash equivalents. The
Company has identified twelve months as its
operating cycle.
2.2 Use of Estimates
The preparation of the financial statements in
conformity with Ind AS requires the Management to
make estimates, judgments and assumptions. These
estimates, judgments and assumptions affect the
application of accounting policies and the reported
amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of
the financial statements and reported amounts of
revenues and expenses during the period. The
application of accounting policies that require
critical accounting estimates involving complex
and subjective judgments and the use of
assumptions in these financial statements have
been disclosed.
Accounting estimates could change from period to
period. Actual results could differ from those
estimates. Appropriate changes in estimates are
made as the Management becomes aware of changes
in circumstances surrounding the estimates.
Changes in estimates are reflected in the financial
statements in the period in which changes are made
and, if material, their effects are disclosed in the
notes to the financial statements.
2.3 Property, Plant and Equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and impairment losses, if
any. Cost comprises the purchase price (including all
duties and taxes after deducting trade discounts and
rebates if any) and any attributable cost of bringing
the asset to its working condition for its intended
use. Such cost includes the cost of replacing part of
the plant and equipment and borrowing costs for
long-term construction projects if the recognition
criteria are met. Likewise, when a major expenditure
is incurred, its cost is recognized in the carrying
amount of the plant and equipment, if it increases
the future benefits from the existing asset. All other
expenses on existing fixed assets, including day-to¬
day repair and maintenance expenditure, are
charged to the statement of profit and loss for the
period during which such expenses are incurred.
For depreciation, the Company identifies and
determines cost of assets significant to the total cost
of the assets having useful life that is
materially different from that of the life of the
principal asset.
An item of property, plant and equipment and any
significant part initially recognized is derecognized
upon disposal or when no future economic benefits
are expected from its use or disposal. Gains or losses
arising from de-recognition of Property, plant and
equipment are measured as the difference between
the net disposal proceeds and the carrying amount
of the asset and are recognized in the statement of
profit and loss when the asset is derecognized.
The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.
For depreciation, the Company identifies and
determines cost of assets significant to the total cost
of the assets having useful life that is materially
different from that of the life of the principal asset.
An item of property, plant and equipment and any
significant part initially recognized is derecognized
upon disposal or when no future economic benefits
are expected from its use or disposal. Gains or losses
arising from de-recognition of Property, plant and
equipment are measured as the difference between
the net disposal proceeds and the carrying amount
of the asset and are recognized in the statement of
profit and loss when the asset is derecognized.
The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.
2.4 Depreciation
Based on a technical assessment and a review of
past history of asset usage, management of the
Company has not revised its useful lives to those
referred to under Schedule II to the Companies Act,
2013 (as amended).
Depreciation is provided on the straight-line method
(SLM) using useful life prescribed in Part C of
Schedule II of the Companies Act, 2013.The useful
life of the following class of assets specified in the
Part “C” of Schedule II of the Companies Act, 2013
are as follows:
The gross value of PPE includes cost of Land &
Buildings amount of Rs.75,42,92,395/- (Previous
year Rs.75,42,92,395/-), Plant & Machinery amount
of Rs. 67,65,38,372/-(Previousyear of Rs.
67,65,00,815/-) Computer and related assets of
Rs.8,79,53,538/- (Previous year of Rs. 8,79,53,538/¬
), Vehicles value of Rs.9,80,30,128/- (Previous year
of Rs. 9,80,30,128/-) and Furniture & Fixtures of
Rs. 4,20,56,781 /-(Previous year of Rs.4,20,56,781 /).
2.5 Intangible assets and amortization
Cost of acquisition of intangible assets & any other
direct costs incurred in relation to such acquisition
are recognized as Intangible assets. Following initial
recognition, Intangible assets are carried at cost less
accumulated amortization and accumulated
impairment losses, if any.
Intangible assets with finite lives are amortized over
the available useful life of film rights acquired while
purchase and assessed for impairment whenever
there is an indication that the intangible asset may
be impaired. The amortization period and the
amortization method for an intangible asset with a
finite useful life are reviewed at least at the end of
each reporting period. Changes in the expected
useful life or the expected pattern of consumption of
future economic benefits embodied in the asset are
considered to modify the amortization period or
method, as appropriate, and are treated as changes
in accounting estimates. The amortization expense
on intangible assets with finite lives is recognized in
the statement of profit and loss, unless such
expenditure forms part of carrying value of asset.
i) Film and program broadcasting rights
(‘Satellite Rights’)
Acquired Satellite Rights for the broadcast of
feature films and other long-form programming
such as multi episode television serials are
capitalised. Future revenues from use of these
Satellite Rights cannot be estimated with any
reasonable accuracy as these are susceptible to a
variety of factors, such as the level of market
acceptance of television products, programming
viewership, advertising rates etc., and accordingly
cost related to film is fully amortized over the
period of life of the asset.
ii) Film production costs, distribution and
related rights
The cost of production / acquisition rights related
to each movie is amortized upon the theatrical
release of the movie.
2.6 Impairment of Assets
The carrying amounts of the Company’s property,
plant and equipment and intangible assets are
reviewed at each reporting date to determine
whether there is any indication of impairment. If
there are indicators of impairment, an assessment is
made to determine whether the asset’s carrying
value exceeds its recoverable amount. Where it is not
possible to estimate the recoverable amount of an
individual asset, the Company estimates the
recoverable amount of the cash generating unit to
which the asset belongs.
Impairment is recognized in statement of profit and
loss whenever the carrying amount of an asset or its
cash generating unit exceeds its recoverable amount.
The recoverable amount is the higher of net selling
price, defined as the fair value less costs to sell, and
value in use. In assessing value in use, the
estimated future cash flows are discounted to their
present value using a pre-tax discount rate that
reflects current market rates and risks specific to the
asset.
An impairment loss for an individual asset or cash
generating unit are reversed if there has been a
change in estimates used to determine the
recoverable amount since the last impairment loss
was recognized and is only reversed to the extent
that the asset’s carrying amount does not exceed the
carrying amount that would have been determined,
net of depreciation or amortization, if no impairment
loss had been recognized. Impairment losses were
recognized in the statement of profit and loss.
2.7 Inventory
Usually, the company is having inventory in serial
content procured from the other parties. The value of
inventory includes cost of content bought from the
content provider & cost of dubbing charges for
conversion of content into local regional language.
Company has calculated the value of inventory
based on the available period of usage of serial
content as per the agreement entered by the service
provider & Raj Television Network Limited.
2.8 Cash and Cash Equivalents ( for purposes of Cash
Flow Statement)
Cash comprises cash on hand and demand deposits
with banks. Cash equivalents are short term
balances (with an original maturity of three months
or less from the date of acquisition), highly liquid
investments that are readily convertible into known
amounts of cash and which are subject to
insignificant risk of changes in value.
2.9 Cash Flow Statement
Cash flows are reported using the indirect method,
whereby loss before extraordinary items and tax is
adjusted for the effects of transactions of non-cash
nature and any deferrals or accruals of past or
future cash receipts or payments. The cash flows
from operating, investing, and financing activities of
the Company are segregated based on the available
information.
2.10 Revenue Recognition
Revenue is recognized to the extent that it is
probable that the economic benefits will flow to the
Company and the revenue can be reliably measured.
Revenue is measured at the fair value of the
consideration received or receivable, taking into
account contractually defined terms of payment and
excluding taxes or duties collected on behalf of the
government. The Company has concluded that it is
the principal in all of its revenue arrangements since
it is the primary obligor in all the revenue
arrangements as it has pricing latitude and is also
exposed to credit risks.
i. Advertising income and income from sales of
broadcast slots are recognized when the related
commercial or programme is telecast.
ii. The company has purchased film rights and the
same has been sold taking the advantage of the
favorable market opportunity.
iii. Subscription income represents subscription fees
billed to cable operators and Direct to Home
(‘DTH’) service providers towards pay-channels
operated by the Company, and are recognized in
the period during which the service is provided.
Subscription fees billed to cable operators are
determined based on number of subscription
points to which the service is provided based on
relevant agreements with such cable operators
(along with management's best estimates of such
subscription points wherever applicable), at
contractually agreed rates with the Company’s
authorized distributor. Subscription income from
DTH customers is recognized as and when
services are rendered to the customer in
accordance with the terms of agreements entered
into with the service providers
iv. Interest on fixed deposit recorded accordingly
rate of interest applied as per deposit form.
v. Foreign pay channel subscription fee received
from different nations according to the agreement
entered by theparties.
2.11 Employee Retirement Benefits
Provident Fund
Retirement benefit in the form of provident fund is a
defined contribution scheme. Eligible employees
receive benefits from a provident fund, which is
defined benefit plan. Both the eligible employee and
the Company make monthly contributions to the
provident fund plan equal to a specified percentage
of the covered employee’s salary. The contributions
are made to the Regional Provident Fund which is
charged to the Statement of Profit and Loss as
incurred.
The Company has no obligation, other than the
contribution payable to the provident fund. The
Company recognizes the contribution payable to the
provident fund scheme as expenditure when the
employee renders the related service.
Gratuity
The Company provides for gratuity, a defined benefit
retirement plan (“the Gratuity Plan”) covering eligible
employees. The plan provides a lump sum payment
to vested employees at retirement, death while in
employment or termination of employment of an
amount equivalent to 15 days salary payable for
each completed year of service or part thereof in
excess of six months.
Vesting occurs upon completion of five years of
service. The Company has obtained insurance
policies with the Life Insurance Corporation of India
(LIC) and makes an annual contribution to LIC for
amounts notified by LIC. The Company accounts for
gratuity benefits payable in future based on an
independent external actuarial valuation carried out
at the end of the year using the projected unit credit
method. Actuarial gains and losses are recognized in
the Statement of Profit and Loss in the period in
which they arise.
Employee benefit plans - Gratuity
A. Defined Contribution plans
i. Contribution to Provident Fund:
Contributions towards Employees
Providend Fund made to the Regional
/Employee Provident Fund are recognised
as expenses in the year in which the
services are rendered.
ii. Contribution to Employee State Insurance :
Contributions to Employees State
Insurance Scheme are recognised as
expense in the year in which the services
are rendered.
B. Defined benefit plan - Gratuity
The Company has a defined benefit gratuity
plan. Every employee who has completed five
years or more of service gets a gratuity on
cessation of employment at 15 days salary (last
drawn salary) for each completed year of
service. The fund has the form of a trust (Raj
Television Network Limited Employees Gratuity
Trust) and it is governed by the Board of
Trustees. The Board of Trustees are responsible
for the administration of the plan assets and
for the definition of the investment strategy.
Each year, the Board of Trustees reviews the
level of funding in the gratuity plan. Such a
review includes the asset-liability matching
strategy and investment risk management
policy. The Board of Trustees aim to keep
annual contributions relatively stable at a level
such that no plan deficits (based on valuation
performed) will arise.
The scheme is funded with an insurance
company (LIC) in the form of a qualifying
insurance policy.The following tables
summarize the components of net benefit
expense recognised in the statement of profit
and loss and the funded status and amounts
recognised in the balance sheet for the Gratuity
plan.
The principal actuarial assumptions used in
determining gratuity obligation for the
Company’s plans are shown below:
The overall expected rate of return on assets is
determined based on market prices prevailing
on that date, applicable to the period over
which the obligation is to be settled. The
estimates of future salary increases, considered
in actuarial valuation, take account of inflation,
seniority, promotion and other relevant factors,
such as supply and demand in the employment
market. Based on the experience of the
previous years, the Group expects to contribute
about Rs.1.72 crores to the gratuity fund in the
next year. However, the actual contribution by
the Group will be based on the actuarial
valuation report received from the Insurance
Company.
The major categories of plan assets of the fair
value of the total plan assets are as follows:
Gratuity plan.
2.12 Taxation
The current income tax charge is calculated on the
basis of the tax laws enacted or substantively
enacted at the end of the reporting period.
Management periodically evaluates positions taken
in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation.
It establishes provisions where appropriate on the
basis of amounts expected to be paid to the tax
authorities.
Deferred income tax is provided in full, using the
balance sheet method, on temporary differences
arising between the tax bases of assets and liabilities
and their carrying amounts in the financial
statements. Deferred income tax is determined using
tax rates (and laws) that have been enacted or
substantially enacted by the end of the reporting
period and are expected to apply when the related
deferred income tax asset is realized or the deferred
income tax liability is settled. Deferred tax assets are
recognized only if it is probable that future taxable
amounts will be available to utilize those temporary
differences and losses.
Deferred tax assets and liabilities are offset when
there is a legally enforceable right to offset current
tax assets and liabilities and when the deferred tax
balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and
intends either to settle on a net basis, or to realize
the asset and settle the liability simultaneously.
2.13 Earnings Per Share
Basic earnings per share is computed by dividing the
profit / (loss) after tax (including the post tax effect
of extraordinary items, if any) by the weighted
average number of equity shares outstanding during
the year. Diluted earnings per share is computed by
dividing the profit / (loss) after tax (including the
post tax effect of extraordinary items, if any) as
adjusted for dividend, interest and other charges to
expense or income (net of any attributable taxes)
relating to the dilutive potential equity shares, by the
weighted average number of equity shares
considered for deriving basic earnings per share and
the weighted average number of equity shares which
could have been issued on the conversion of all
dilutive potential equity shares. Potential equity
shares are deemed to be dilutive only if their
conversion to equity shares would decrease the net
profit per share from continuing ordinary operations.
Potential dilutive equity shares are deemed to be
converted as at the beginning of the period, unless
they have been issued at a later date. The dilutive
potential equity shares are adjusted for the proceeds
receivable had the shares been actually issued at fair
value (i.e. average market value of the outstanding
shares). Dilutive potential equity shares are
determined independently for each period presented.
The number of equity shares and potentially dilutive
equity shares are adjusted for share splits / reverse
share splits and bonus shares, as appropriate.
2.14 Foreign Currency Transactions
The Company operates internationally and is
exposed to foreign exchange risk arising from foreign
currency transactions. Foreign exchange risk arises
from future commercial transactions and recognized
assets and liabilities denominated in a currency that
is not the company’s functional currency (INR).
Foreign currency transactions are recorded at the
exchange rates as on the date of the transaction and
the exchange difference arising from foreign currency
transactions is dealt with in both Profit and Loss
account and also in Balance sheet as the case may
be.
2.15 Segment Reporting
As per Ind AS 108, company shall disclose
information to enable users of its financial
statements to evaluate the nature and financial
effects of the business activities in which it engages
and the economic environments in which it operates.
But Raj Television Network Limited doesn’t have any
reportable business or Geographical segment types
as mentioned in Ind AS 108.
2.16 Borrowing Costs
Borrowing costs consist of interest and other costs
that the Company incurs in connection with the
borrowing of funds. All borrowing costs are expensed
in the period they occur.
2.17 Events after the reporting period
Ind AS-10 has disclose impact about the entity shall
incur any events either favorable or unfavorable that
occur between the end of the reporting period and
the date when the financial statements are approved
by the Board of Directors in case of a company, and,
by the corresponding approving authority in case of
any other entity for issue. There are no material
events occurred after the reporting period, which
requires adjustment to Assets / Liabilities as on
March 31, 2025.
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